New perspectives on the legal sector

Sometimes it is really refreshing when people turn issues around and deliver new ways of looking at things. Recently we read two reports from persons doing exactly that, both about Legal Services Act and about the low rate of female partners at law firms.

The implementation of Legal Services Act and the Alternative Business structure in the UK has been a hot topic amongst lawyers for some years and there has been several warnings about the problems that will arise in the UK for lawyers due to this new legislation that make it possible for non-lawyers to invest in law firms. In Sweden, for example, the bar association does not believe in this legislation since it will profoundly change the role of the lawyer, making the law firm more like a “normal” business without the ethical focus that is stressed by the bar association. In most cases lawyers seem to believe that this new legislation will harm the legal profession and become a threat to existing law firms. At the recent Reinvent Law 2013 in Silicon Valley, Dan Katz of MSU Law delivered his thoughts of the future of legal market and how law firms ought to change their business model to be more prosperous for the future. Ron Friedman at PrismLegal has summarized Dan’s thoughts in the post “The Future of Legal Market is Not Evenly Distributed (Live from Reinvent Law)”. Simply put, Dan Katz believes that the restriction on non-lawyer ownership is a big limitation on competition and innovation and that this is the reason why UK has changed the rules with Alternative Business structures. Most lawyers still believe this will harm the lawyers, but according to Dan Katz this rule actually protects the lawyers. The reason for this is that if law firms cannot raise external capital, while on the same time their new competitors can, this will be a great disadvantage for law firms.

Other interesting new thoughts have been provided by Jordan Furlong on Law21 in the post “Why women leave law firms, and when they’ll return”. Usually we talk about how to keep women in law firms, since women are leaving law firms at an abnormal rate. Instead his theory is that women are leaving law firms at a perfectly rational and normal rate. “It’s men who are staying in law firms at an abnormal rate. Women aren’t the faulty outliners; men are. Women enter law firms and find organizational problems such as archaic workflow systems, inept pricing mechanisms, skewed compensation structures, and largely ineffective management”. Therefore, the question ought to be why men do not leave such an organization. It is not any problem with these women. He believes that women have actually been pointing the profession in the right direction all this time. Interesting new perspective, isn’t it?!